Treasury denies Exxon waiver to drill in Russia

The Treasury Department announced Friday that it will not waive sanctions for ExxonMobil to drill in Russia.

The move ends what could have been seen as a controversial conflict of interest for the Trump administration, with the oil giant's former CEO Rex Tillerson now leading the State Department.

"In consultation with President Donald J. Trump, the Treasury Department will not be issuing waivers to U.S. companies, including Exxon, authorizing drilling prohibited by current Russian sanctions," Treasury Secretary Steve Mnuchin said in a statement.

Exxon applied for a waiver from U.S. sanctions against Russia so that it could move ahead with a deal negotiated by Tillerson in 2012 to partner with the Russian state-controlled oil company, Rosneft. The deal would have allowed the two companies to work on projects exploring and drilling for oil and natural gas in the Kara Sea and Black Sea.

It is unclear when Exxon applied for this waiver, whether it was before or after Tillerson was sworn in, and for which specific deal they asked sanctions to be waived.

The State Department has said that Tillerson will recuse himself from any issue involving Exxon for two years.

"He is not involved with any decision made by any government agency involving Exxon during this time period," a State Department official told ABC News Thursday.

Still, critics were quick to point to the waiver application as a potential conflict of interest.

"Considering Russia's continued aggression in the Ukraine, its interference in our elections on behalf of the Trump campaign, the Trump Administration's many suspicious ties to Russia and the Kremlin, and the fact that Trump's own Secretary of State led ExxonMobil, alarm bells should be going off for the American public," said Rep. Maxine Waters (D-CA), ranking member on the House Financial Services Committee. "I have long said that we need to keep a watchful eye on Rex Tillerson."

The sanctions were implemented by the Obama administration in 2014 in response to Russia's annexation of Crimea and incursion into eastern Ukraine. Those sanctions prohibit U.S. businesses from providing goods, services, or technology to five Russian energy companies, including Rosneft, the country's largest oil company -- freezing the partnership with Exxon.

At a ceremony overseen by Russian President Vladimir Putin and Tillerson in 2011, Exxon and Rosneft signed a Strategic Cooperation Agreement -- a partnership to jointly develop projects in Russia, the U.S. and around the world. The two companies later agreed to more ventures, including the 2012 deal for development in the Kara and Black Seas.

The announcement from Treasury comes amid still unanswered questions about ties between Russian officials and members of the Trump campaign and transition teams. Two Congressional committees are still investigating the matter, as well as the FBI.